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PROJECT OUTLINE _

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‘Mexico City, Mexico. Support for singleton ‘contract agent
operating into right-wing political milieu in Mexico for
intelligence purposes with some covert action by-product.

2. Objectives

a. Objective The objective of this project is to provide
support for a U.S. contract agent who has access to a wide variety
of right-wing political elements and organizations in Mexico.

b. Conduct of Project The contract agent, LIHUFF/1, was born
in Mexico and has had a long history of business experience in
Latin America, as well as, over the past fifteen years, in Mexico.
At the present time, he is Executive Director of U.S, Chamber of
Commerce of Mexico City, which gives him a great deal of mobility
in both American and Mexican business circles. Generally, it is
from the Mexican business community that the financing and support
for right-wing political movements, organizations, and institutions

_eminate. Given the general trend of recent Mexican regimes, as
- well as the. present one, toward more governmental regulation and

manipulation of the economic life of the country, the Mexican
businessmen continue to support right-wing political movements or
ostensibly nonprofit civic, research, and other types of organiza-

* tions used. by them as front instrumentalities for expounding

their philosophy and taking action in the politico-economic fields.
LIHUFF/1 has natural access through his present position and past
extensive experience in the business community here. Over the
years, as a matter of fact, hs numerous associations with these
elements have earned him their trust and respect. In a ncaaien ER
the past four years he has funded Lic. Agustin NAVARRO Vasquez
organization, consisting primarily of Instituto de Investigaciones
Sociales y Economicos, A.C. (IISE), "Espejo" (a magazine on
politico-economic affairs), and Novimiento Universitario de
Renovadora Orientacion (MURO, a student organization). Also, he
has handled LICHANT/1 who has a history of, and numerous associa-.
tions in, the Mexican right-wing political arena. These and many
other contacts of this type will provide the basis for his reports
on this particular segment of the political spectrum in Mexico.

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c. Targets Right-wing political elements and organizations

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in Mexico. “This would include not only Lic. NAVARRO, IISE, "Espejo, }

and MURO, but Hugo SALINAS Price, Jorge. SIFGRIST Clamont and numerous
others of political significance on the Mexican scene. In connection

with LICHANT/1's present

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position, it should be possible to obtain. information on
the Ministry of Education and other aspects of the Mexican
education system which, according to the’ last word received

* from Headquarters, is somewhaz of a priority requirement. z
oe *. d. RMD, This project is responsive to Priority A3d
a and f of the Related Mission Directive for Station Mexico ats

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City (approved October 1963). This priority reads in part:

“obtain information on the stability of the Government ...

he through high-level penetrations and throuch surveillances and :

RE controlled assets of other powerful political groups such as. {!
wie ' > the Frente Civico... and through continued development and 7 i
te . influencing of high-level government contacts." As an vo

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a ancillary measure, the project could contribute to MHSPAWN r
S. bo objectives of the RMD under certain circumstances where use i
to “of right-wing platforms ana urganizations is merited.
3. Background, e j
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a. Developments Leading '.p to Project. ie a
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(1) Mexico, politically, is a country in which, * 4
soe increasingly, a centrist political concensus is developing 3
; a -- based on the impact of education and economic development. , 4
wi baes ws- = On either side though of this growing central political : ob.
spectrum are extreme ‘left and extreme right wings which are t Dg
» quite active and quite vocal and which have an influence in PE 4
“the form of individuals, organizations, and movements greatly ; ae |
out of proportion to their numbers. Political disturbances H eo ge
‘ and efforts to induce lack of stability eminate in the main I we fA
from these two extreme wings. As the centrist force grows i f & 3

slowly, it is possible and probable that these two wings will
intensify their efforts and become more and more radical.

The Station has intelligence coverage of the extreme left- :
wing, but has neglected the equally.important extreme 'right- i"
wing when, in the final analysis, any threat to Mexican >
political stability by fomenting unrest and incidents does, ‘
_and wil] continue to, eminate from the right-wing as well as ie
the left-wing. Assumin g that, as indicated in the present E
RMD, the long range national policy objectives of the U.S.
toward Mexico are to encourage a stable democratic government
and political environment, then coverage of the right-wing

is required if for no other reason than meeting normal Station
responsibilities for political reporting. HBFINCH contacts
in.this area have been, and probably will continue to be,
virtually nil. ‘In fact,.at present in this area HBF INCH
contacts are non-existent.

(2) LIHUFF/1 was first picked up as a contact by
Station Mexico City in 1950 after having been a contract
agent for Station Panama City for some three years (while

- engaged in business in Panama}, He has been in a continuing. -

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'. ¢ relationship of one degree or another with. this Station

ever since then. This relationship developed from "contact"
-, into formal contract status in November 1962. LIHUFF/1 has ;
wi. +f: + handled Station congtacts and activitics with LIHUFF /2 i

mepets oe tas well as LICHANT/] from 1962 to date. In _

o>, +, addition, he has done a good deal of reporting on right-wing

_ activities from other sources and other contacts of his. i
jt: cs. Subsidy of the LIHUFF activity for MHSPAWN purposes ©” - |

Wien, ; will be terminated effective
30 June 1965. Use of LICHANT/1 will be continued in an
intelligence reporting capacity and,in a limited way, for
covert action efforts.

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b. Prior Negotiations, There have been no prior
negotiations with the Mexican Government, intelligence or
security services, or ODYOKE elements on this project.
LIHUFF/1 has been used in the past, prior to his contract
with KUBARK, as a source by ODIBEX and ODMARK.

: a 7 c. .Relationship to Other Projects. This project
} has no relationship to any other Station project. .

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d. Utilization of Same Operational Assets,
, CIHUFF/1 has not beenutilized'on any other project, past. or
present, except to the extent|he was involved with the LIHUFF

activity Indicated in subparagraph 3a(2) above.

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. (1) LtHUFF/1 (OA granted on 10 October 1962
moe with no number forwarded to field) -- Subject was born in
vos Mexico, is fluent in Spanish, and js about 49 years old.
ey Since World War [1, he has been in private business in Latin
America, first in Panama and then in Mexico from 1950 on.
During World War [I, he was in Army intelligence in China and,
therefore, had an understanding of covert operations prior to
his KUBARK experience. While in Panama, he was employed by
the Station there for several years ™ to organize a net
directed against a target of high priority interest". This
association was terminated by reason of his move to Mexico ;
for business reasons. Although he was in contact with this _4
Station virtually from his time of arrival in Mexico, he was :
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not picked up as a contract agent until November 1962. His
cover for his past and proposed activities has been natural:
that of a businessman with a conservative political out look
and interested in the economic and political posture of: the

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Mexican Government. Contact with him ts covered by a social
relationship between his case officer and.himself; this is
easily maintained. given the large American community in Mexico
City. He hes had no formal intelligence training other than
that he received from the Army during World War II and on the
job with KUBARK. Control of Subject is no problem inasmuch
as he is an American citizen and has had considerable
experience with KUBARK by now, His motivation is that of an
attraction to this type of work, being a U,S, citizen ina
foreign area, natural concern forhis business interests, and,

“ probably, the compensatory return from KUBARK. He is witting
of his KUBARK association and, aside from his World War II

intelligence experience with ODIBEX, in 1961 he had an
intelligence relationship with ODIBEX which has long since
been terminated.

(2) LICHANT/1, (OA granted on 22 April 1963,
but no number forwarded to field) -- Subject is a ver
conservative Mexican educator and intellectual about hg years
of age. He has alternated between working in various
capacities for the Government.of Mexico and in Mexican

universities. At the present’ time, he is Private Secy. in Min,

position which gives him unique access in the government to
the general fields of education and politics as well as
considerable contact with other influential people in right«
wing circles.. He was recruited by LIHUFF/1 in August 1962

on the pretext: of doing research work and collecting infor-
mation for LIHUFF/t's general use for business purposes.
Subject has natural cover for obtaining: information on right=
wing activities from others due to his long association with
right-wing activities as a student, educator, and government
servant. Contact between Subject and LIHUFF/1 is maintained
under the guise of private business relationship. Subject has
had no intelligence training from KUBARK other than that
imparted by LIHUFF/1 in discussing his reports. There has
been no problems in control since essentially. Subject under-
stands that this is a business relationship with certain
requirements involved for it to be sustained, Subject's
motivation is that of an intellectually-convinced conservative
who has common objectives and outiook with LIHUFF/1 on |
political and economic matters plus the financial aspect of
the LIHUFF/1 relationship. Subject is not witting of KUBARK
or ODYOKE interest in his activities and reporting. He has no
known contacts with other intelligence or security services,
past or present. --

b. Mechanisms, There will be no mechanisms involved
in this. project although LIHUFF/! will continue to have access
to Lic, NAVARRO, and, in turn, to IISE, "Espejo, ‘ and MURO for

intelligence purposes.

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In the unlikely, event of compromise, LIHUFF/1 could i
continue to claim that he was not dolng anything that hundreds _

- 2’) . Commonly-accepted practice: trying to influence the. politico- :

economic .climate. In Mexico for thelr own benefit. Whatever ‘
the extent of the compromise, there would be no repercussion
Insofar as other operations er activities per se were
concerned except that there might be some tightening of the
general operational climate for a while. If, somehow,
LIHUFF/1's true role were disclosed, he could probably be
backstopped with a minimum of publicity through high-level
Station contacts with the Government (explaining the Statlon
interest In right-wing circles as attempting to follow what
they were up to In case they became a threat to the stabI lity
of the present government).

6. Coordination. — . :

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with other governments and. intelligence services...
assumed that normal coordination with varlous elements within.» -— Po
-KUBARK. Headquarters will take place. . fo _

7. Gosts. . ,

a. General. It Is requested that this project be
author izeq 18 the_amount of $9,000 per annum effective. ;
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b. Breakdown of Costs (per annum). 7 4
(1) LIHUFF/1 salary $3,600.00 7 4
(2) Operational Expenses 3,000.00 7 4 ;
(3) Entertainment and Travel 2,400.00
Tetal per annum $9,000.00

_No non-KUBARK funds will be Involved In this activity. |

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: . Funding_and_Accountabl lity... Since this project i
will only” Involve salary for the most part, no unusual he

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Cc. Forelan Currency. it. Is ant éipated chat aay

forseeable foreign currency requirements will be within the
Station's capacity to handle.

Commitments, No commitments have. been made to aan
LIHUFF /1 45 ent than a salary of $300.00 per month with a a
_ thirty day’ Ss notice on termination. .

‘requirements are deemed necessary for accountability. In
the event that funds are passed for any type of special ‘
activity other than salary, normal standards of accountability H

wiht be used,

8, Annexes,
-a. Administrative Plan or Fiscal Annex, Not applicable.
b. Communications, Not applicable.

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c. echnical Support, Not applicable. is
d. Loglstics, Not applicable. Le
e. Lligenc. Rot. applicable. 7

9. Emergency Conditions.

: if an official antl- USA atmosphere of suffictent
Intensity prevalled In Mexico, LIHUFF/1 very probably would
not be able to malntain himself here, particularly If his

employment continued in his present capacity. - This,

howaver, fs not seen as anything except a very remote contin-
gency due to the Government of Mexico's dependence on the U.S.
‘tourist trade. In a general war, It is probable that LAHUFF /1 _
would be able to continue in place without too much difficulty | °:
and would be willing to continue operating on current objectives
or to undertake entirely new operations against new targets.
Contact and communications should represent few problems In |

Mexico. i

TERT eee

ARC ATMRT Ge Le

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